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Obtaining a License to Conduct Mortgage Financing and Leasing Activities

No: 341000082695 Date(g): 12/5/2013 | Date(h): 3/7/1434 Status: No longer applicable

Translated Document

Based on the Real Estate Finance Law issued by Royal Decree No. 50/M dated 13/8/1434 H, and its Implementing Regulation issued by Minister of Finance Decision No. 1229 dated 10/4/1434 H, and The Finance Lease Law issued by Royal Decree No. M/48 dated 13/8/1434 H, and its Implementing Regulation issued by the SAMA Governor’s Decision No. 1/M dated 14/4/1434 H, and The Finance Companies Control Law issued by Royal Decree No. M/51dated 13/8/1433 H, and Implementing Regulation issued by SAMA Governor’s Decision No. 2/M dated 14/4/1434 H, and since Article 99 of the Implementing Regulation of the Finance Companies Control Law states that "Companies and establishments engaging in finance activities in the Kingdom of Saudi Arabia prior to the Law’s entry into force must provide SAMA, within the first nine months of the period prescribed in Article (36) of the Law, with their plan to correct their situation according to the Law or a plan to exit the market."

Therefore, all banks operating in the Kingdom that wish to continue engaging in real estate financing and/or leasing activities must apply to SAMA for a license to stop practicing these activities entirely starting from 14/10/1434 H. Copies of the finance Laws, their Implementing regulations, and licensing application forms and guidelines can be obtained through the following links:

- Finance Laws and Their Implementing Regulations

- Licensing Provisions and Requirements

 

According to Circular No. 22129/67 dated 9/4/1440 H, and Circular No. 58934/67 dated 24/9/1440 H, and in reference to Circular No. 39100070455 dated 19/6/1439 H concerning the procedural requirements for mortgage registration, SAMA advises as follows:

 

First:Licensed banks may continue to engage in real estate financing without the need to renew their existing real estate financing license or obtain a separate license. However, they must obtain no-objection letters from SAMA for launching related financing products in accordance with the provisions of the relevant Laws, regulations, and instructions.
 
Second:Licensed banks may continue to engage in leasing financing until new instructions are issued by SAMA in this regard, provided they obtain no-objection letters from SAMA for launching related financing products in accordance with the provisions of the relevant Laws, regulations, and instructions.